Runescape Economics - A Guide to the Market

For the past month and a half my team at the Runexchange have been working hard at studying why the Runescape economy has been failing (why prices have been decreasing).

About four months ago the market price of gold on the site 4rsgold.com (Runexchange sells to this site exclusively) was $0.53 per M. Last month the price was around $0.40 per M and this past month around $0.33 per M.

In this image you can see four lines:



Black: The current Market Price
Gray: Last week's Market Price
Red: The Trend Line (Average 3 days)
Green: Non-changing Market price of single buyer

It appears that Runescape is failing. This is due to the increase in money due to the squeel of fortune that was introduced. This increase of money devalues the currency by making gold easier to attain. All items in Runescape become less valuable and thus the RSGP to USD value falls.

The only way to continue to make the same amount of money selling Runescape gold now is to produce more gold. Or you can find a buyer who is willing to sell. The Runexchange's 4 month study found that exchange websites such as Sythe.org have higher market prices as opposed to chinese whole-sale websites like 4rsgold.com. The difference is about $0.10 per M.

In conclusion, the study found that Sythe.org was the better site to go to sell as $100 per B was worth the bonus. Market beats whole sale, however the economy is still going down hill.




***All data above is provided by the Runexchange - a group that works specifically on researching the Runescape economy and that buys and sells gold. All information is original, the data on the graph is original and comes from values from 4rsgold.com. All information is legitimate. The Runexchange is a proud partner with RSProdragonClan.

 

There's a large difference between "runescape is failing" and "the average price of gold is decreasing". In fact, I'm not sure what your claim is. Do you mean to say that runescape.com is dying? Pretty sure it has more players than in the same month of last year, and due to the microtransactions recently implemented, Jagex is making much much more money than before. Or do you mean that the black market for runescape is failing because profit margins are slimmer?

Your claim of squeal of fortune pumping in enough coins to affect the market is absolutely absurd. There are more than 50 trillion coins in the game (see jagex's official citation) and I'd estimate that squeal of fortune has pumped in no more than 100 billion coins since its introduction. You know what has killed prices? Gold duping. Jagex did not rollback after the gold dupe, and it's estimated that up to a trillion coins were introduced. Not only were 1 tril coins introduced, these coins were flooded into the RWT market, not just the general game economy. By my estimates, no more than 20% of the players in runescape are involved in rwt. So there are 2 theories:

100B coins introduced by SoF into all runescape players, many of whom do not RwT.

1000B coins introduced by gold duping, solely into players who participate in RwT.

The reason I'm coming across so harshly is that you have proclaimed that you and your team have been working for months to produce these baseless hypotheses, which are in fact false. Please, don't make claims without backing up what you're saying and fully investigating your subject. And if you could clarify what you mean by "runescape is failing" that would be nice as well

 

I would also like to add that 4rsgold.com sells GP at $.68/M and roughly $.64/M once orders reach 50M+ whereas members who wholesales (or sells in small quantities such as 4rsgold.com) are $.10 lower at the minimum. Therefore, your claim that Sythe has a higher average gold price compared to Chinese wholesale markets is false. Not trying to be harsh, but everything you've stated above is actual false or the opposite to what you stated above.

 

I Lol'd pretty hard.

___

The only thing that I disagree with video about is saying that SoF users are not RWT'ers. Personally I think the majority are RWT'ers, the mindset we have is perfect for SoF. "Hm, maybe I'll get some really rare item they'll be awesome for my account."

 

I don't think the Gold Dupe could have an effect like this now. It happened almost 10 years ago. (Unless there was a more recent one which I'm unaware of).
We're talking about a more recent plunge in Gold prices.
You've brought up good points, and I apologize if my comments seemed offensive or too strong in any way, I was just sharing my teams theories and asking . You probably would know better that we would since I assume you've been in this market longer than us.
However, your posts did make me revise our idea:
Squeal of fortune is not necessarily the sole reason for price falling, but it can account for the dip in prices since people willing to pay for gold in Runescapes (Members) now have a way of buying the gold more or less risk free by buying SoF tickets.
In other words: RS, which has an infinite supply of gold has essentially entered in the RWT business.


By Runescape is "failing" we meant that it's prices are going downhill. I admit, it probably was a pretty bad choice of words

Obviously, our data is limited. It's four month and we will continue to collect data to be more certain. Maybe we just happened to start collecting data at a randomly high point. Maybe prices always go up around that time of year. Maybe they always go down at this time of year. Maybe this is just normal market fluctuations.


I don't know about you guys, but we have found that in general wholesale worked better for us.
To clarify: We're talking about how much 4rsgold was buying for from individuals selling gold TO them.

Again, I doubt it's duping that caused this.
Has there been a more recent Duping glitch than 2003?
What do you think of our revised theory?
Thanks.

 

There recently was a dupe (glitch) that allowed members with max cash stacks (2147M) to multiply them repeatedly. Jagex addressed that in the RSOF so I'm not quite sure how you missed that information. Thanks for clarifying, wholesale is no doubt a better alternative than buying in smaller quantities, especially in your situation. Honestly, I have not met a single member whose won the 200M/400M prize offered in SOF. Any type of item that has value behind it typically is untraceable. During its release a handful of users bought free spins to see how adequate the influx of prizes would be. It turned out that the prizes weren't worth the money they had spent so. You also didn't capitalize on gold farming, it's effects aren't nearly as bad as the initial bot nuke but it still plays a role. Perhaps you should add that into your mix as well. Generally speaking, more and more players are realizing that morals in-game don't compare to morals IRL. With that being said, farming/selling gold has become mainstream and will continue to grow.

 

Your price data is all accurate, however if you'll notice the later downward spike on your graph that can be attributed to the gp dupe. SoF may have an effect on price declines, but no one except Jagex has the data on how many spins have been purchased and how much the average gp per spin is. It's just that unfortunately when it comes to SoF hypotheses, we can only really make logical predictions and there's no data to back them up.

Could you reupload your graph to include months on the x-axis? I'd be curious to see exactly when these declines in price happened

 

Yes we'll be able to upload the graph, we'll just need to get someone to edit it. It might take a little while.

 

just when i thought i had seen it all, rsgp disparity charts.

gp is a freefloating currency with no known market cap. with that being the case, it doesn't operate remotely the same as conventional economics. aggregate demand, production propensity, resource utilization rate, equilibrium, fiscal and monetary policies. gp isn't a controlled economy by any stretch of the imagination and thus statistical data will never function to an investor's benefit. it is impractical and furthermore, impossible, to make assumptions about gp prices without any of the above elements.

with no natural or artificial deflators for gp, it will inevitably be as valuable as dirt. i don't know what your team is aiming to prove, but it's practicality is severely limited.

 

Jagex has said that there is an equation that controls the game economy and therefore it is possible to manipulate the game economy. In addition people believe that Runescape has roughly 455B gold in the game (http://www.tip.it/runescape/?times=6 - please show your citation on the 50T because I couldn't find it and this does not seem accurate) which would mean that the gold farmers and buyers/sellers would control a large majority of the money flow. This would also influence value of items in the game.

I have been able to get the value of gold to USD through the universal market price (roughly $0.40 per M). I used 4rsgold.com as my example site. This was to see if open exchange was better than the 4rsgold.com and I saw that it was. I also saw that a huge decrease took place.

I realize that I misspoke. SoF is not the only reason for the decline in price. The duping glitch and RWT do both contribute. I meant to mention that SoF was just an example. These money boosters and also the increase in players have made prices drop.

Gold farming has a huge impact on this. Gold farmers and phishers who are able to take large amounts of money from people and then spread it to a controlled group of people impacts the game economy in a bad way for everyone. The price goes down for them and the game gets worse for others.

I am NOT saying that the game Runescape is failing because that is false. I am saying that the market value of gold to USD is falling. I am explaining that the reason is due to these updates that have introduced more gold into the game and hurt its value. You can see the duping glitch cause the drop on the graph above.

Just because this isn't the stock market doesn't mean that it is an economy.

 

What is retarded here is that you think that prices going down mean "failing" economy or whatever. That prices per coin go down has nothing to do with people paying less money for gold, but has more to do with the amount of gp they get when purchasing. People are not wasting less money in RSGP they are just getting more coins. Inflation is not synonym of "failure". If runescape were to cut all the amount of money people have in half. Prices would go up roughly x2, would the economy be twice as better then?
No? That's how bad your concept of economy is.
Imagine that instead of an x0.5 multiplier of gp, runescape constantly does a 1.05x of gp every month, because naturally, more gp is created than it is lost. By the time 14 months have passed, that would amount to a 2x increase of gp, not only would 1$ buy you less gp, but botting would earn you more gp, and doing legitimate activities ingame would earn even more gp.

 

from your citation of an article that is outdated by 7 years and how you managed to make a connection between economic fundaments and stock markets

are you sure you know what you're talking about

 

Prodragon, please stop spreading false information. I may be new to this forum but it seems that you have no idea what you are talking about.

Anyone can take spreadsheets and mark them every 3 days based on only 1 website and then call themselves a market analysis expert.

Maybe you should have noted that the Runescape article your using is from the year 2005.

Everyone knows (almost everyone)that the more of something the less it's worth in most situations. Runescape like every other game I ever played doesn't have a big enough gold sink to maintain the same amount of inflation in-game which is mostly caused by high alchemy.

It would only make sense that the RSGP to USD exchange rate is lowering because RSGP inflation is much higher than USD inflation.

 

I just want to finalize this and show everyone that in fact I called the gold price decline back in November. I sold all of my gold back then and am no longer RWT. My graph is based off of the site 4rsgold.com and I spent about three months on that. I looked at many other sites but 4rsgold.com offers the highest prices per M.

I also did not post any other articles. I only used my companies statistics.

So in conclusion I was right, and it was CORRECT information.

 

Your study is highly inaccurate though. It's like saying that you studied the market in California and so that must be true for the market of Transylvania, and while they're both part of the greater global market they are completely different markets that have different amounts of currency flow, different rules and regulations, and besides being part of the same metamarket are not even similar.

 

How is it inaccurate? We went to about ten different gold selling websites and looked at the prices. We found the site offering the highest market prices and recorded prices daily.

The green line depicts the value of Sythe.org's market price as of the date of the last black point on the graph. One can see that Sythe offers more money than 4rsgold.com.

You can also see the downwards trend of the gold price (from $0.53 to $0.30). We said back in November that we predicted a larger decline in gold prices and the current gold price is now $0.25.

Your example isn't really valid. We studied the gold markets for about 10 or more sites and recorded the highest price. We located the trend and the reason for this trend (game updates and glitches) and were able to predict the next drop to the date (release of EoC).



So could you please tell me what was so inaccurate - how were we inaccurate about predicting the fall of gold prices around 11/20/12 (week of) from nearly $0.40 per M down to $0.25 per M?

 

The price of Runescape gold is just supply/demand. More and more gold is coming into the game via high alchemy, coin share, whereas not as much is leaving the game. Only real way for it to leave Is buying things from NPCS (which has been made redundant through the GE) and dying.

 

See you are right on where RSGP gets its value but you do not grasp how its value is assigned. High alchemy actually decreases the amount of gold in the game as it costs more to buy the runes and items to use then you actually receive from the spell.

Gold leaves the game through players quitting, dropping money/items, and purchasing items from NPCs. However in truth the gold does't really leave the game if you are buying as it is converted into that item.

The price is more effected by large quantities of gold that are introduced into the game. Gold duping, RWT is the main cause and other reasons stated above.

 

Unless you are buying the materials used to high alch in a store, then your statement has absolutely zero truth to it. How can you soundly assert that gold is lost, but not gained?

If I buy a yew long for 400 GP, that GP goes to the seller. Now when I buy 5 fire runes and a nature, that GP goes to the seller as well. When I finally alch said item, it turns to gold. Thus, money is gained because in the previous actions gold was neither lost nor destroyed.

Also, your number is extremely off for the gold available in game. Take a nice look at the info-graph Jagex released upon reaching 200 million "players"

http://www.runescape.com/200million/infographics.ws

 

Oh I am glad you posted this. When I posted the previous link I mentioned that I didn't find that accurate (455B). 28T sounds much better! Someone had originally said 50T and I thought that would be too high.



So for high alch there are different ways that it could happen (I rushed what I was saying):

1. If all items are player made --> Gold is created
2. If all items are purchased from NPC --> Gold is lost
3. Runes purchased, items player made --> Either created or lost


See it matters on who makes the stuff. Still the point of my post was that high alch would not put enough gold into the game to make large spikes, but maybe a gradual decline. You may have noticed the $0.15 decline in the past month - that was due to the EoC upgrade which made numerous items lose value (including death runes and other special runes). The EoC upgrade however made some items rise in prices dramatically (the air rune went from 8gp to 17gp).